Not the end of the story

It must have been unnerving for Finance Minister Arun Jaitley to find the utilisation of a staggering ~65,000 crore as central goods and services tax (GST) transitional credits for July alone. Attributing such utilisation to a possible “mistake or confusion”, the Central Board of Excise and Customs is said to have sought verification from those utilising credits of ~1 crore and above.

One would be inclined to believe that once “mistakes” or “errors” are detected amongst such units, the verification may have to be extended to units availing credit of less than ~1 crore as well.

This is not the end of the story. The amounts of such credits taken on valueadded tax (VAT)-paid stocks that remained unsold as on July 1 are also eligible for transitional credits. State VAT authorities, therefore, have to undertake similar exercises. This would be a nightmare for both tax collectors and taxpayers.

Rules governing these complex transitional credits were notified just days before the introduction of the GST, leaving little time for traders to comprehend them for proper compliance. Despite persistent demands from all quarters, Jaitley was somewhat obdurate in not deferring the launch to September.

Till now, there has not been a formal division for exercising administrative jurisdiction over tax-paying units between the central excise and state VAT authorities. The net result is a total mess for which Jaitley as chairman of the GST Council cannot escape blame. making e-commerce payments. In India, bitcoin transactions are yet to be legalised.

As the popularity of this cryptocurrency rises, the government has been trying to regulate its use. Recent comments by a top official of the Reserve Bank of India are discouraging and disappointing. The government is trying to bring bitcoin transactions within the ambit of the Securities and Exchange Board of India. This goes against the interests of investors. These attempts appear whimsical; there is no need to panic so much over the bitcoin or try to ban it.

Bitcoins should be declared legal tender in India. This will likely spur economic activity and help generate additional indirect tax revenues. Banks will gain in transaction charges. Bitcoins can fulfil the government’s digital push. This may also minimise black money. Stiff regulation of the bitcoin will go against the Digital India initiative.